High Court
Case Details
MC 3223/2012 BEFORE HON’BLE MR JUSTICE B. K. SHARMA Heard Mr. P. K. Roy, learned counsel for the applicants-respondents. Also heard Mr. A. C. Borborah, learned Senior Counsel assisted by Mr. U. K. Nair, learned c ounsel for the writ petition.
Legal Reasoning
By means of this application the respondents have prayed for leave of th is Court to pass the final order in respect of the show cause notice, which has been challenged by the petitioner in the writ petition. The respondents have pra yed for the leave in view of the interim order operating in the writ petition. T he interim order is dated 09.08.2012. By the said order, it was provided that th e respondents would release payment of the petitioner found due for execution of the contract. It was further provided that the proceeding in respect of the imp ugned show cause notice would continue with the participation of the writ petiti oner, but no final order should be passed without the leave of the Court. The petitioner, which is a co-operative society has been appointed and a warded with the handling and transport contract on regular basis for two years f rom the date of submission of the joining report. The appointment was made on 08 .07.2011 and is governed by specified terms and conditions as has been laid down in the tender documents/MTF. The petitioner had the occasion to approach this Court by filing a writ petition being WP(C) No. 6335/2011 when the contract was terminated by letter da ted 05.12.2011. The primary ground on which the order was assailed is that befor e issuance of the letter dated 05.12.2011 terminating the contract, the petition er was not put to any kind of notice and for that matter there had been violatio n of the principles of natural justice.
Decision
The writ petition was disposed of by order dated 19.12.2011 interfering with the termination letter dated 05.12.2011. While doing so, liberty was grante d to the respondents to conduct a fair enquiry into the allegations made against the petitioner after giving a reasonable opportunity. For a ready reference the relevant portion of the order dated 19.12.2011, by which the said liberty was g ranted, is quoted below: (cid:28)Before parting, it is made clear that the respondent Nos.2 to 7 are at liberty to conduct a fair enquiry into the allegations as have been surfaced and brought against the petitioner giving them reasonable opportunity to have their say in the matter and they will be at liberty to take appropriate and consequential dec ision in respect of the contract thereafter. Till any decision is taken by the r espondent Nos. 2 to 7 in compliance of the direction as issued hereunder, the pe titioner shall be allowed to carry on the operation of transportation in terms o f the letter of appointment dated 08.07.2011 (Annexure-2 to the writ petition), without prejudice to any inquiry or consequential action as stated. With the observation and direction as indicated above, the writ petition is allowed. (cid:29) After the aforesaid development the respondents (FCI) issued the Annexur e-9, Show Cause Notice dated 26.03.2012 to the petitioner. For a ready reference , the said show cause notice is reproduced below: (cid:28)REGIONAL OFFICE, ITANAGAR No.Cont/HTC/Reglr/Rezu/RO/AP/2011-12/227 Dated.26.03.2012 SHOW CAUSE NOTICE 1. Whereas M/S Namsai Lamps Ltd., Namsai, Lohit District, being the 1st low est tenderer/ bidder participated in the tender enquiry floated vide NIT issued under reference No. Cont./HTC/Rglr/ Tender/RO/AP/2010-11 dated 12.04.2011, was appointed as Handling and Transportation Contractor(HTC) for handling and transp ortation of foodgrains/ sugar from Rly. Siding/FSD Tinsukia to FSD Tezu(Ar.P.) o n regular basis for 2(two) years vide letter No. Cont./HTC/Rglr/ Tender/RO/AP/20 10-11 dated 08.07.2011. 2. Whereas the Consultative Committee Members for Arunachal Pradesh, Food C orporation of India, Ministry of Consumer Affairs, Food & Public Distribution, G ovt. of India, after visiting FSD Tezu, had submitted a report with the FCI on 2 1.08.2011, alleging gross irregularities committed by M/S Namsai Lamps Ltd. in t ransportation of foodgrains from Railway siding/FSD Tinsukia to FSD Tezu. 3. Whereas after receipt of the aforesaid report dated 21.08.2011, the comp etent authority of the FCI, Regional Officer, Itanagar constituted its three mem bers committee which submitted its report on 25.11.2011 confirming the report of the aforesaid consultative committee members dated 21.08.2011. 4. Whereas being satisfied with the report of the aforesaid two committee d ated 21.08.2011 and 25.11.2011, the transportation contract of M/s Namsai Lamps Ltd., dated 08.07.2011 was terminated vide letter dated 05/07.12.2011 under clau se-X of the Model Tender Form (MTF). (cid:29) Along with the show cause notice the petitioner was also furnished with the inve stigation report of the movement of stocks from railway siding/FSD Tinsukia to F SD Tezu. The said report was prepared by three authorised officers of the FCI re cording the findings as quoted below. (cid:28)Findings: 1. The analysis of the Truck movement from Table-B reveals that the Trucks at Sl. No. 2, 3, 4, 7, 8, 9, 14, 15, 18 and 19 have not reached its designated d estination i.e. FSD Tezu and it is evident that the stocks have been diverted mi dway after loading at Tinsukia. 2. That M/S Namsai Lamps Ltd has inulge in diverting the stocks midway bein g the State nominee as well as the HTC for FCI and in connivance with depot inch arge FSD Tinsukia is issuing out stocks after loading at FSD Tinsukia without ac tually reaching FSD Tezu and subsequently recorded in Depot records. The depot i ncharge has apparently made only paper works without real transaction of foodgra ins. 3. The depot incharge has issued handling workslips and allowed M/S Namsai Lamps to rais the Handling & Transportation bills without delivering stocks at F SD Tezu. The depot incharge has shown ghost receipts and issued false handling w orkslips and false transportation bills which is benefiting the contractor since he raises bills against them. 4. Since no shortage of stocks at FSD Tezu is shown in record, it is eviden t that the stocks are issued to M/S Namsai Lamp Ltd. directly, being the state w holesale nominee without actually receiving the stocks at FSD Tezu. The above ar rangement is recndered possible only because the said handling and transportatio n contractor (HTC) appointed by FCI for the route Tinsukia to Tezu and the state wholesale nominee for Tezue and Anjaw districts (who receives the PDS stocks on behalf of the State Govt. is coincidentally the one and the same i.e., M/s Nams ai Lamps Ltd. The above findings clearly points that depot incharge FSD is in hand in glove wi th the handling and transportation contractor cum State Govt. nominee i.e., M/s Namsai Lamps and is aiding and abetting the malpractices indulged into by the HT C. Also the HTC has failed to discharge his duty as per contractual obligations as governed by the terms of appointment, i.e., to deliver stocks at FSD Tezu wit hin admissible transit period without unloading, temporary storage etc enroute. The both HTC and Depot incharge is causing financial loss to the Corporation by raising false bills for work not undertaken. Depot incharge, FSD Tezu is a party to the ulterior motives of the HTC and thus both of the above are acting in a w ay inimical to the interest of the Corporation. (PESSEN YOMCHA) (CHANDAN DAS) (B C TAHBILDAR) AG-II(D) Manager (Vig) Manager (Contract) (cid:29) It was at that stage, the petitioner approached this Court assailing the Show Ca use Notice itself. While entertaining the writ petition, by order dated 09.08.20 12, this Court passed the order directing the respondents to release the payment payable to the petitioner. It was also provided that the petitioner would co-op erate with the inquiry being conducted by the FCI. However, it was further provi ded that no final order should be passed without leave of the Court. In the aforesaid circumstances the FCI/respondents have filed the instant applic ation seeking leave of this Court to pass the final order. Mr. P. K. Roy, learned counsel for the applicants-respondents submits that in vi ew of the earlier order of this Court, the petitioners having been provided with the reasonable opportunity of being heard in respect of the impugned Show Cause Notice, the leave prayed for, to pass he final order is required to be granted. He submits that this Court exercising its power of judicial review under the Ar ticle 226 of the Constitution of India cannot sit on appeal over the impugned sh ow cause notice and the respondents should be allowed to proceed with the matter taking note of the facts and attending circumstances and in accordance with law . Opposing the aforesaid prayer of the applicants-respondents, Mr. A. C. Borborah, learned Senior Counsel representing the petitioner submits that the entire acti on on the part of the FCI being founded on mala fide exercise of power, the same is required to be interfered with. He further submits that the FCI Authority sh ould be directed to place on record the final order, which might be passed pursu ant to the impugned proceeding for perusal and scrutiny of this Court. During the course of argument, he has produced the notice dated 03.12.2012 addre ssed to the Managing Director of the petitioner Co-operative society by the Gene ral Manager, FCI. The said Show Cause Notice has been termed as the final Show C ause Notice in reference to the impugned Show Cause Notice dated 26.03.2012. He submits that although the petitioner has responded to the said Show Cause Notice , of authority of the FCI was not competent to issue the same during the pendenc y of the instant writ petition. Mr. P. K. Roy, learned counsel for the applicants-respondents has also produced the letter dated 03.01.2013 addressed to him by the Deputy General Manager(R) FC I furnishing intimation about movement of food grains from railway sliding/FSD T insukia to FSD Tezu by the petitioner without any interruption on the part of th e FCI. The letter further states that payment for the work executed by the petit ioners has also been made. Mr. P. K. Roy, learned counsel for the applicants-re spondents further submits that the particular Show Cause Notice dated 03.12.2012 has nothing to do with the impugned proceeding as the allegation made on the sa id Show Cause Notice pertains to the period from September, 2012 i.e. after the interim order of this Court passed on 09.08.2012. At this stage Mr. A. C. Borbor ah, learned Senior Counsel representing the petitioner submits that contrary to the stand taken in the above referred letter i.e. 03.01.2013, the petitioner has not been paid any amount pertaining to the works executed by it. Amidst the aforesaid submissions and counter submissions made by the learned cou nsel for the parties, this Court has now decide as to whether the leave prayed f or by the respondents should be granted or not. On being asked Mr. A. C. Borbora h, learned Senior Counsel representing the petitioner submits that the entire ac tion on the part of the respondents being the product of mala fide exercise of p ower without taking into account the stand of the petitioner, the same is liable to be interfered with. In this connection he has referred to the statements mad e in paragraphs 28 to 35 of the writ petition in which various grounds has been urged. For a ready reference, the said grounds (paragraphs) are quoted below: (cid:28)28. That the petitioner states that the allegations as levelled against the pet itioner society vide the show cause notice dated 26.03.2012 are on the face of i t perverse and the same have been issued only to harass the petitioner society a nd terminate the regular contract of the petitioner society facilitating appoint ment of persons of choice to execute transportation works on ad hoc basis for th e rest of the term. Further, the prescriptions as made in the communication date d 08.06.2012 towards withholding the bills of the petitioner society is a pressu re tactic adopted by the authorities of the corporation inspite of pendency the said WP(C) No. 3047/2012 before this Hon’ble Court against the non-release of it s bills for September, 2011 and thereby protect the persons reasonable for the i llegalities as committed in the matter and highlighted in the writ application b eing WP(C) NO. 3047/2012. It is the apprehension of the petitioner society that the earlier order of termination passed vide order dated 05/07.12.2011 and the p resent show cause notice dated 26.03.2012 are nothing but an attempt by the auth orities of the Corporation to somehow suppress the illegality committed against the petitioner society in proceeding to pay the bills to an outsider without any jurisdiction or authority, thereby committing the offence of cheating and crimi nal misappropriation of money. 29. That the peritioner states that the petitioner society in terms of the contract entered into with it are being regularly allotted food-staff fo r transportation and handling, by the authorities of the respondent corporation. During the months of June, 2012 and July 2012 the petitioner society has been a llotted more than 2100 MT tones of Rice, 200 Mt of Wheat and 300 MT of Sugar for carriage. The petitioner society has duly executed the assigned works and was e xpecting release of its admitted dues, however on account of the prescription as made in the communication dated 08.06.2012 the bills of the petitioner society have not been released thereby subjecting the society and its members to financi al hardships. 30. That your petitioner states that the bills for the period when the purpo rted allegations came to levelled against the appellant were duly submitted by t he applicant and the respondent authorities after verification of the same both from the depot wherefrom the materials were allotted for dispatch and also from the depot where the materials were delivered proceeded to clear such bills for p ayment. As such the allegation of failour on the part of the petitioner society to deliver the materials allotted to it for transportation is clearly perverse. The said steps as taken would reveal that the materials as entrusted to the peti tioner society for transportation and handling were duly delivered to the depot prescribed and there existed no discrepancy on this account. However, from purpo rted unilateral report of the Committee basing on which the show cause notice wa s issued reveals that there exists manipulation in the records as maintained by the authorities of the Corporation at the destination Depot for which the petiti oner could not be held accountable or responsible. It may be mentioned here that the petitioner society or any of its members/agents have no access to the said documents and as such it is feared that such manipulation if existing were so ma de subsequently by the vested circle in connivance with FCI personnel so as to p ut the petitioner society in trouble and facilitate termination of its contract. That your petitioner states that from the vicious steps as taken by the 31. authorities in the matter it is the genuine apprehension of the petitioner that orders towards terminating the contract of the petitioner would be passed withou t a proper and due appreciation of the facts involved. The show causes reply eve n if submitted by the petitioner society the same would not be considered in the correct perspective and on receipt of the same consequential orders towards ter mination of the contract would be passed, which is apparent from the measures be ing taken in the matter by the authorities. It is further gathered by the petiti oner that a move is on to appoint a Transportation and Handling Contractor for t he works allotted to the petitioner society on Ad-hoc basis for the remaining pe riod of the contract and if such a move is allowed to materialise the same would result in manifest injustice and would cause grave prejudice to the interest of petitioner society and its members. 32. That your petitioner states that the steps as taken by the authorities o f the respondent Corporation against the petitioner society since the initiation of the Contract in question clearly reveals the vindictive attitude as existing in the matter. The authorities of the respondent Corporation. 33. That the petitioner states that it is a fit case wherein your lordships would be pleased to pass an interim direction failing which the petitioner socie ty would be prejudicially affected and it would suffer irreparable loss and dama ge. 34. That in the event of your lordships being pleased to pass an interim dir ection as has been prayed for, the balance of convenience would be maintained in favour of the petitioner society inasmuch as the petitioner society has not err ed in any manner in the discharge by it of its contractual obligations and has b een discharging its duties in terms of the contract. The goods as handed over to the petitioner society for handling and transportation has been duly accounted for and there is no shortage of the same at the delivery point and there is also no allegation of any loss of goods as such. The manipulation made of the record s in the possession of the authorities of the respondent corporation, now is bei ng sought to be used against the petitioner society and basing on such manipulat ed records, the contract of the petitioner society is being sought to be termina ted. However, no proceeding worth its name came to be instituted against any off icial of the Corporation in whose custody such Documents/Records were kept. The grounds assigned for issuance of the show cause notice in question are all prim a facie, vague, perverse and the same cannot be sustained on perusal of original records. Further, the decision to withhold the bills of the petitioner is nothi ng but another ploy adopted by the authorities to frustrate the works undertaken by the petitioner society under the contract in question. That the petitioners state that the impugned actions on the part of the 35. respondent authorities in illegally restraining the petitioner society from disc harging its contractual obligations and such restrain being based on perverse an d vague allegations, the petitioner society and its members have been prejudicia lly affected. The rights and protection guaranteed to the petitioner society and its members, under Article 14, 16 and 19 of the Constitution of India has been blatantly violated by the authorities of the respondent no.2 corporation. The re spondent no.3 inspite of being apprised with all relevant particulars of the ill egality perpetuated against the petitioner society, has further compounded such illegality by remaining a mute spectator to the same. In view of the facts narr ated above and series of hostile actions on the part of the FCI authorities agai nst the petitioner society, it is per-eminently a fit case wherein, pending a Ru le, your Lordship may direct the authorities not to take any formal decision in the matter without the leave of this Hon’ble Court. (cid:29) In the earlier round of litigation this Court had granted the opportunity to the respondents to proceed with the matter in accordance with law. The operative pa rt of the said order has already been quoted above. It was pursuant to the said liberty, the respondents have issued the impugned Show Cause Notice dated 26.03. 2012, which has also been quoted above. On perusal of the said Show Cause Notice along with the investigation report appended thereto, it cannot be said that th ere is no prima facie case against the petitioner. The FCI authority being satis fied with the grounds assigned in the Show Cause Notice has adopted the particul ar course of action for which liberty was also granted by this Court. In paragraph 5 of the application it has been stated thus: That the applicants state that it is only after the above interim order dated 09 .08.2012 passed by this Hon’ble Court the writ petitioner has submitted his repl y to the show cause notice dated 26.03.2012, on 12.09.2012 before the competent authority. The competent authority of the FCI thereafter, has considered the sai d reply and also all other materials on record along with the reports of the two successive enquiry committees, constituted for the purpose which along with all relevant records were already furnished to the writ petitioner and after due co nsideration in the matter has taken a final decision in this regard and has been made ready for passing final order. (cid:29) In the aforesaid circumstances this Court while exercisi ng its power of judicial review under Article 226 of the Constitution of India w ill not sit on appeal over the Show Cause Notice. It is not the case of the peti tioner that the said Show Cause Notice is devoid of any ground warranting interf erence of this Court. Under similar circumstances, the Apex Court in TN Hodavarman Vs Union of India h as held that a notice of Executive Authority must be reproduced before approachi ng the court. The FCI authority has formed an opinion towards issuance of the sh ow cause notice and this Court has also provided for participation of the petiti oner in the enquiry and the petitioner having participated in the enquiry, it is now for the FCI authority to pass a final order taking note of the grounds, whi ch the petitioner has assigned or likely to assign. While doing so the said auth ority should also take into account the above quoted paragraphs of the writ peti tion. Accordingly the prayer made in this application is allow ed granting liberty to the FCI, i.e. the respondents to pass the final order con sistently win the observation made above. Whatever may be the outcome the consid eration of the case in the above manner, the same shall be communicated to the p etitioner. The observation made in this order shall not produce the rights and contentions raised by the parties and the same shall not be the guiding factor towards passi ng the final order. Miscellaneous case stands disposed of.